Doing Business In.. 2020

Last Updated July 15, 2020

Colombia

Trends and Developments


Authors



ASLABOR Valdés was established in 1955, as a consultant for businesses in diverse areas. The firm now handles mostly employment matters, providing legal advice and judicial services and representation to businesses from the private sector as well as public companies, from a team of experts in labour law and social security. ASLABOR’s offices are located close to Bogotá’s downtown and its labour courts. The team specialising in labour law and social security is led by German Valdés and María Ximena Valdés, who are both recognised professors in Labour Law at some of Colombia’s best universities.

Introduction

Work constitutes the axis of the functioning of all social organisation, as it represents both the mechanism through which individuals can obtain the means to meet their vital requirements, and the engine of all productive activity, be it of a material or intellectual nature. As a fundamental element, all human development involves the incidence of work, and that is the reason why the states take care to regulate it, especially subordinate labour, in order to co-ordinate the interests of the people who intervene around it.

Colombia has been no stranger to legislative efforts aimed at regulating subordinate labour, and it even experienced a time – in the 1940s – when it stood out for its regulatory initiatives, aimed at providing protection to subordinate workers, within a framework of social and economic balance, which reflected the recognition of the legitimacy of the interest of both parties – employer and worker – to achieve their objectives together. Both the employers and the workers need each other: the employer needs the workers in order to go forth with its enterprise, and the workers require the effort, means and initiative of the employer.

The Código Sustantivo del Trabajo (Substantive Labour Code – CST) constitutes the axis of legislation on the matter, and was issued in 1950 with a great sense of balance, without abandoning the notion of special protection for the worker, given that such notion justifies the issuance of special provisions aimed at compensating for the economic and social asymmetry that exists between workers and employers.

Under the pretext of giving effect to the provisions of article 53 of the Political Constitution issued in 1991, the element of extreme protection of the worker is now prioritised in many judicial decisions, with the risk of losing sight of the social balance ordered in the initial precept of the CST. It is true that the social and economic conditions of the parties have caused an inequality between employers and workers, but this level of inequality is visualised in the articles of the code in question, as justification for the provisions through which the worker is clearly and equitably protected. However, these protective expressions toward the workers cannot go so far as to risk breaking the balance that was carefully taken into account in the drafting of the universality of precepts that formed the initial text of the CST.

Context

In the regulation of any bilateral relationship, the interests of both parties must be considered. If one of them has weaknesses, the rules must try to compensate them with benefits or provisions that lead to total equilibrium, but if this includes excesses, a disarticulation occurs that leads to discouragement for the other party, which, reasonably, must desist from its interest in the contract. In the field of employment, if the worker is in a disadvantaged position, the standards should balance it, but never reverse it.

In the Colombian labour normative set, the CST is preserved as a starting point, which, as noted, was built with a special sense of balance, recognising the socio-economic disadvantages of the worker but without ignoring the legitimate interests of employers. The set of norms contained in said code has had several modifications, some of them accurate, but others quite unfortunate since they were generated under the protection of political and electoral interests, far from the real needs of the country's productive sector.

In 1991 a new Constitution was issued, with a high and correct social content, article 53 of which provided for the obligatory issuance of a "labour statute" that should contain "fundamental minimum principles", including measures with excessive protective effect toward workers, with the potential to reverse the desirable balance ordered by Article 1 of the Code. The implementation of these “fundamental minimum principles” can lead to a notable imbalance in the way they are defined; as such, no "labour statute" has been issued in the 30 years that the Constitution has been in force, despite the large number of "labour statute" projects that have been submitted to the study of the Congress. However, many judges and, in particular, the Constitutional Court have invoked such principles in many decisions that have not been noted for their accuracy and fairness.

Special Cases

There are specific topics in which the main axes of conflict are presented, mostly generated by decisions of the Constitutional Court that are widely applauded in certain social sectors but clearly distanced from the texts of the norms and the objective for which those provisions were created. Examples include the reinforced protection for health reasons, in relation to which a worker immobility scheme has been constructed, even if a worker lacks the faculties to carry out the work for which they were hired; the pre-retirement protection, which has not even arisen from a norm but is an exclusive creation of the Constitutional Court’s decisions; and the plurality of company unions within the same company, which has encouraged the uncontrolled creation of small unions within companies, without further motivation other than structuring situations that allow the members of such unions to have protective rights against employers' decisions. In short, there are several situations that may represent burdens for the employer but do not arise from the content of the laws but from judicial decisions that are borne out of a misunderstanding of some legal precepts.

In the case of reinforced protection for health reasons, which may be the issue currently generating the most conflict, the idea and the text of the law (article 26 of law 361 of 1997) have been openly distorted by the use that the Constitutional Court has ended up giving it, because the objective of the norm, as it is clearly read in its text, is to avoid the employment contract of a worker who suffers from a disability being terminated due to such disability, unless it makes it impossible for the worker to carry out the work for which he or she was hired, in which case permission is requested from the Ministry of Labour to  verify the relationship between the worker's physical or pathological condition and the impossibility of performing the task of his/her contract; if such impossibility exists, the Ministry must authorise the termination of the contract. This means that if the reason for the termination of the contract is unrelated to the worker's health difficulties, the employer may terminate the contract under the terms permitted by law and in whatever legal manner is appropriate to the situation.

However, the understanding that the Constitutional Court has imposed is that it is forbidden to terminate the contract of a worker with any kind of limitation in their health without the prior permission of the Ministry of Labour, and the problem is that this Ministry, for reasons of political weight, does not grant such permission or, in cases in which the situation raised by the employer is evident because there is a powerful reason to dismiss the worker, it delays the study for many months and possibly beyond a year, during which time the human and legal situation has suffered potentially irreparable deterioration.

Something similar occurs with reinforced protection for reasons of maternity or lactation, because here also the Constitutional Court has adopted a position that conflicts with the norms that expressly regulate the situation and is even distant from how it is regulated in the ILO conventions.

The regulations of the CST differentiate distinctly between a pregnant woman going through her pregnancy in healthy and normal conditions, and a woman who has a risky pregnancy or is already on maternity leave, to give the latter greater protection and to absolutely prohibit her dismissal, while the former can be dismissed if she has performed acts that constitute just cause for dismissal (as determined in the CST, article 62), which have been confirmed by the labour inspector.

However, the Constitutional Court has conflated the two situations and imposed, as a rule, the prohibition of dismissal of all pregnant or lactating workers, regardless of whether they are prevented from working or not, unless there is prior permission from the labour inspector. The situation includes many more consequences of the decisions of said Court, but now it is enough only to point out that two situations with different normative treatments have been paralleled in open opposition of the legal texts that regulate them, without these texts being declared contrary to the Constitution. 

Another special situation, although not similar to the previous ones because it involves no norm or law whatsoever, is what is known as the pre-retirement protection, which is not established by any legal text but is generated by analogy with a norm that was created many years ago for a public sector entity that no longer exists. It consists of a prohibition on dismissing workers who were missing three years or less to consolidate their right to an old-age retirement in the pension system, known as Regimen de Prima Media con Prestación Definida. In this situation, in the application of the expressions of the Constitutional Court, measures and procedures have been built that have generated limitations to some legitimate decisions by employers, and have generated some level of abuse among workers who have been afforded protection. 

An additional event that deserves to be noted and that also stems from a decision of the Constitutional Court is the one generated by the declaration of the non-enforceability of the legal rule that prohibited the plurality of company unions in the same company or before the same employer. When this prohibition was lifted, some workers took on the task of forming more unions within their companies, seeking above all the generation of union privileges for the directors of these new organisations. The more unions there are in a company, the more union directors there will be, and all with privileges that protect them against possible dismissals, although the employer can look to the just causes established legally for this. Clearly, this creates administrative difficulties within the company.

An aspect that must be considered by employers is that of the outdated mentality of many union leaders, who remain anchored in the theories of the prevalence of the proletariat that had their boom around 1917 – ie, structures that are more than 100 years old and have been impervious to the great events of the 20th century and the 21st century so far, which include a great economic depression, a world war (the first was before the triumph of the Bolshevik revolution) and the development of the virtual world, among many others of great importance. In short, they seem not to notice that the world is different from the one that served as a nest for the construction of the ideas that they still proclaim today. This mind-set and inflexibility have prevented unions, or many of them, from assimilating the idea of ​​becoming a co-management body of the employer's business developments, and thus they think more about being co-owners of the company, but without the risk of participating in the losses that is present in all business activity, as has been demonstrated by the negative effects of the COVID-19 pandemic.

Corollary

The reality is that Colombia is a friendly country for business initiatives, as shown by the large number constituted year after year and the permanent internal growth of such initiatives, especially those that have been able to build a positive human environment, with the participation of workers in the commitment to achieve a vehicle that has positive effects for all of them and in which the benefits for the workers are proportional to the achievement of the objectives by the employers. The growth in the results of such business activity must be reflected in an increase in benefits for workers, as was determined when legislation was passed on the figure of the participation of workers in the profits of companies, which provides a benefit and an element of stimulation for the workers, because to the extent that greater profits are achieved for the employer, they will in turn have a participation in that greater amount in the economic results of the company.

This figure existed in the regulations prior to 1950 and was preserved in the CST as an optional possibility for the employer, which was left with the power to establish and regulate it freely, giving it a tool that could be highly positive in the pursuit of business goals and positive worker understanding, if properly managed.

In Colombia, even considering the aspects previously exposed, a positive stage is observed for the creation of companies and for their constant strengthening, for which it is important to have sufficient knowledge of the labour norms, both laws and jurisprudence, with careful management of relations with workers and an adequate accompaniment in the administration of the aforementioned labour regulations.

ASLABOR Valdés

Carrera 6 # 34 – 62
Bogotá D.C.
Colombia

+285 8061

aslabor@aslaborltda.com www.aslaborvaldes.com
Author Business Card

Trends and Development

Authors



ASLABOR Valdés was established in 1955, as a consultant for businesses in diverse areas. The firm now handles mostly employment matters, providing legal advice and judicial services and representation to businesses from the private sector as well as public companies, from a team of experts in labour law and social security. ASLABOR’s offices are located close to Bogotá’s downtown and its labour courts. The team specialising in labour law and social security is led by German Valdés and María Ximena Valdés, who are both recognised professors in Labour Law at some of Colombia’s best universities.

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